Annual Report 2017 - Bridon-Bekaert Ropes Group

Bridon-Bekaert Ropes Group

Segment BBRG
Combined sales: € 454 million
Capital expenditures (PP&E): € 15 million
Total assets: € 574 million
Employees: 2 598

Economic environment in 2017

Mining rope markets have picked up somewhat over the course of 2017, thanks to more mining activity driven by increased commodity prices. Offshore oil and gas rope markets remained subdued in absence of new investments. 

Other markets relevant for the ropes business are – amongst others – the equipment sector (crane and hoisting), forestry and fishing, and construction markets. Elevator, timing belt and automotive markets relevant to the advanced cords business continued to perform well in 2017.

Our activity performance

Bridon-Bekaert Ropes Group (BBRG) achieved 42% sales growth. The integration of the Bridon activities since the end of June 2016, accounted for an increase of 38%. The former Bekaert activities within BBRG delivered 5% organic growth reflecting almost 4% volume increase stemming from double-digit growth in the advanced cords business and a modest volume increase in ropes. 

The advanced cords business activities have performed strongly throughout the year. The steel ropes activities in North America, Australia and Chile gradually reported higher sales volumes on the wave of increased demand in the mining sector. The European and Brazilian entities, which are heavily dependent on oil, reported very weak sales and results throughout the year.

Underlying EBIT was € 15 million at a margin of 3.3%, reflecting the difficult conditions in oil & gas markets and the margin impact of continuous wire rod price increases. The projected recovery of Bridon-Bekaert Ropes Group is taking longer than anticipated due to the absence of a rebound in offshore oil & gas activities and the slow reconversion and entry process into more diversified market segments. While the order books are modestly growing, they have an extended delivery window with limited immediate growth effects.

BBRG invested € 15 million in PP&E in 2017, half of which in advanced cords and the other half in steel ropes manufacturing sites worldwide.

Strategy towards a turnaround

The management of Bridon-Bekaert Ropes Group is implementing actions to strengthen its market positions and to gradually leverage the benefits of its increased scale. 

Bridon-Bekaert Ropes Group is putting into practice the same transformation tools that have been implemented successfully within Bekaert. These programs will help create a turnaround in cost effectiveness, sales growth and margin capability and should progressively improve the performance of the segment over the next years.

Moreover, the team is spearheading innovation in synthetic and hybrid ropes in anticipation of ever more demanding subsea and mining applications and regulations.  Read more about the newest developments in the Technology Chapter of this Annual Report.